For the individual wanting to
break free of the unending
sea of collectives and
institutions contending for
his soul...and more...put together
by a Visionary Philosopher, so I've
been told. Maybe you want to stay
tuned to see if that's true...
with notes on The End of the Nation State.

Friday, March 21, 2008

Derivatives explained...with history

Note the article was written in 2001.

"In August 1998, an unexpected non-linearity occurred that made a mockery of the models. Russia defaulted on its sovereign debt, and liquidity around the globe began to rapidly dry up as derivatives positions were hastily unwound. The LTCM financial models told the principals they should not expect to lose more than $50m of capital in a given day, but they were soon losing $100m every day. Four days after the Russian default, their initial $3b capital base lost another $500m in a single trading day alone!"